The Trans-Pacific Partnership is a 30-chapter Rubik’s cube that had to be reworked until it made 11 governments happy. After five years of negotiation, it was finally inked Monday – setting the stage for a tough battle in America.
The broad outlines of the deal suggest that it is indeed the “gold standard” for international commerce, as Hillary Clinton said. But that another Clinton in another day, when she championed the TPP as secretary of state. Now she’s seeking the Democratic presidential nomination, and she repudiated the “gold standard” on Wednesday.
Clinton’s switch reflects the broad, dangerous rise of protectionism in the Democratic Party, the very party that gave the world a U.S.-led system of free trade after World War II.
Like Clinton, times change. Although some Obama-haters and America-firsters in the Republican Party will fight the Trans-Pacific Partnership in coming months, most of the opposition will come from Democrats.
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No 11-sided agreement will perfectly serve the interests of everyone who signs it. Critics of the TPP are right to be concerned about some issues, including the possibility that Japan and perhaps other countries might still have too much latitude to manipulate their currencies to put U.S. industries at a disadvantage.
Other objections are strange. Some Americans are alarmed that other nations may find it hard to impose artificially low prices on U.S. pharmaceuticals. But those price controls have forced American consumers to bear most of the high costs of research and development of new drugs. Countries as wealthy as Australia and Canada ought to pay more of the freight; there are other ways to help destitute patients in places like Vietnam and Peru pay for medicine.
Unions and environmental organizations – major Democratic constituents – have already decided that the agreement is anathema. Their rhetoric frequently equates the Trans-Pacific Partnership with the North American Free Trade Agreement (and greatly exaggerates the downsides of NAFTA).
Barack Obama – the architect of the plan – begs to differ. He says he has secured solid environmental and labor protections, the latter including minimum wages, humane work hours and workplace safety standards. The president deserves a hearing from his own party.
What Obama couldn’t produce was an agreement that had no losers. No president could, because free trade is inherently disruptive: It always hurts some industries and enterprises.
That’s why he insisted that Congress reauthorize the Trade Adjustment Assistance program as his gave him fast-track authority to complete the TPP. The assistance offers relief to workers in industries disrupted by new competition.
But the prospect of losers is not a reason to cling to import barriers. If there’s a consensus about anything in economics, it is that lower trade barriers produce greater prosperity.
If enacted, the Trans-Pacific Partnership would eliminate many thousands of tariffs that now burden U.S. exports to Pacific Rim nations. Washington would benefit more than any other state as markets expanded for its apples, wheat, potatoes, software and other goods.
More American exports translate into more American jobs. Cheaper imports translate into more money in American pockets. This agreement deserves the benefit of the doubt.