Trans-Pacific deal more than trade

Original Article

Most commonsense people rightly assume that reducing trade barriers is good in and of itself. But it’s a mistake to think that the Trans-Pacific Partnership involving 11 countries plus the U.S. – that is close to being concluded after six-plus years of negotiation under the Obama administration – is primarily a free trade pact. It’s also a misstep to grant the Obama administration fast-track authority and the attendant secrecy on all details of this trade pact. The experience with Obama’s Affordable Care Act, his executive order on immigration and his ongoing nuclear agreement negotiations with Iran remind us that the devil in the details, once passed and implemented, can be harmful and problematic to correct.

TPP has beneficial objectives, such as opening up Japan’s highly restricted agricultural markets to more imports from the U.S. But, as details of the trade pact leak, we see that trade liberalization may just be a small part of TPP. Much of the agreement’s language appears to be devoted to establishing global authoritarian decision-making on environmental, energy, labor, immigration and even intellectual property policy.

As for trade policy, TPP would give multinational corporations new powers that would circumvent American sovereignty and transfer the negotiation and implementation into the hands of stateless and faceless regulators and bureaucrats and away from congressional representatives and state legislators. Trade policy would then become more remote and opaque, with new legal impediments blocking American prerogatives in regulating and controlling U.S. markets.

President Obama’s executive orders have already stripped Congress of much of its authority over immigration, carbon emissions and the environment. Why help Obama further extend the transfer of power to supranational bodies and expand the Obama Doctrine – the tenets of which include the downsizing of America, leading from behind and engaging the world through international rather than American institutions?

Indeed, it may be that Obama is pushing TPP under the guise of bipartisan trade expansion while being more intent on advancing the next steps of his very partisan political agenda. For instance, leaked parts of TPP show that the agreement enables multinational corporations to end-run U.S. laws that protect IP rich and venture capital-backed companies. The agreement facilitates the implementation of environmental regulations – such as those dealing with so-called climate change – that would trump those established by U.S. lawmakers. TPP may also establish a regime with the power to override Congressional actions imposing restrictions on the “free flow of labor” between the U.S. and Mexico.

In the past, under previous presidents, fast-track trade negotiations and agreements might have made sense, particularly when a multitude of tariffs existed before the establishment of the World Trade Organization in 1995. But in the last two decades tariffs have been greatly reduced, leaving trade deals to focus more on global politics and power than on economic dysfunction.

President Obama has already largely overturned the U.S. constitutional system of checks and balances and dissipated much of America’s former power and prestige. Why the Republican-controlled Senate recently passed the fast-track provision to advance Obama’s secretive trade pact is an enigma. But now House members need to get out from under the illusion that TPP is primarily about expanding free trade.

Scott S. Powell

Senior Fellow, Center on Wealth and Poverty
Scott Powell has enjoyed a career split between theory and practice with over 25 years of experience as an entrepreneur and rainmaker in several industries. He joins the Discovery Institute after having been a fellow at Stanford’s Hoover Institution for six years and serving as a managing partner at a consulting firm, RemingtonRand. His research and writing has resulted in over 250 published articles on economics, business and regulation. Scott Powell graduated from the University of Chicago with honors (B.A. and M.A.) and received his Ph.D. in political and economic theory from Boston University in 1987, writing his dissertation on the determinants of entrepreneurial activity and economic growth.