Over at Equitable Growth The advocates for the TPP and TATIP should be making the following points:
- The gains from trade from these agreements will be equitably distributed as a result of policies X.
- The stronger copyright protections will actually boost world growth.
- Alternatively, if (2) is false and the stronger copyright protections are actually bad for the world, it will benefit the United States to receive higher rents from our past and future investments in intellectual property, and the United States ought to exert its bargaining power to get a better deal for us.
- The dispute-settlement provisions will lead to better political-economic governance in the world as a whole, and will lead to harmonization at the top rather than a race to the regulatory bottom via policies Y.
Those are the arguments that should be made--if they can--to command general support for the TPP and the TATIP.
But, as Dean Baker points out, those are not the arguments that are being made: READ MOAR
...to help push fast-track trade authority through Congress. He headlined a column:
'Economists actually agree on this point: The Wisdom of Free Trade.'
The piece then goes on to argue for fast-track trade authority to allow for the passage of the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Pact (TTIP).
It's nice that Mankiw has apparently gotten out his bag of economist's holy water and blessed them both as free trade agreements, but that doesn't make it true. (Hey, I want to have the Congress Gives $1 Trillion to Dean Baker Free Trade Act. As an economist in good standing, Mankiw will have to support this free trade measure.)... There are merits to reducing trade barriers, but traditional trade deals will have winners and losers.... So people, including economist people, may reasonably oppose them if they think the losers will be hurt so much that it offsets the gains from the deal. (Yes, we can do redistribution, but that is a children's story. We don't.)
But the key point here is that neither the TPP or TTIP is a traditional trade deal.... These deals are mostly about putting in place a business-friendly structure of regulation. Some of this business friendly regulation involves increasing barriers in the form of stronger and longer patent and copyright protection. (Yes, that is 'protection,' as in protectionism.)...
There is one other big point which in Mankiw's piece which needs correcting. Mankiw tells readers:
Politicians and pundits often recoil at imports because they destroy domestic jobs, while they applaud exports because they create jobs.Economists respond that full employment is possible with any pattern of trade. The main issue is not the number of jobs, but which jobs.
Mankiw probably missed it, but we had a really bad recession when the housing bubble collapsed in 2007-2009 and the labor market still has not fully recovered. Millions of people are still unemployed or have given up looking for work. Tens of millions are unable to get wage gains because of the continuing weakness of the labor market. In principle we could get back to full employment with large government budget deficits, but that is not going to happen for political reasons.... If we want to get back to full employment, we have to reduce our $500 billion (@ 3 percent of GDP) trade deficit. (This is the intro econ on which all economists agree. It can even be found in Mankiw's textbook.)...