The Trans-Pacific Partnership: Warnings From NAFTA

[ProSense]

24. The most telling

part of Baker's piece:

The leaked chapter on intellectual property indicated that it would likely mean sharply higher drug prices in many countries since the TPP would strengthen patents and related restrictions on selling drugs. The final agreement may limit the ability of governments to regulate fracking. In the United States, federal law prohibits state and local governments from requiring disclosure of the chemicals used in the fracking process. This makes it far more difficult to detect pollution of ground water and drinking water. The TPP may include a similar provision.

It may also include restrictions on the ability of governments to regulate the financial sector. This could allow banks to skirt rules in Dodd-Frank or comparable financial reform bills approved by other countries.

It is likely that many of the provisions in the final agreement would be highly unpopular if they were put up for a vote, but the whole point of getting the deal as a fast-tracked take it or leave it deal is to prevent individual provisions from ever being considered. And there will be enormous pressure to take it.

Everything at this point is speculative. Still, it's hard to believe that the President would support a treaty that undermines his environmental, financial and health care regulatory efforts.

Here's a good point, counterpoint between Baker and Krugman.

Dean Baker: Paul Krugman and TPP

I've got to take some issue with my friend Paul Krugman over his blogpost pronouncing the Trans-Pacific Partnership (TPP) no big deal. As a trade question he is undoubtedly right. The countries in the pact are ones with whom the United States already has extensive trade ties and generally low barriers. Eliminating or reducing the remaining barriers cannot possibly have much impact on the U.S. economy.

However it is a misunderstanding to see the TPP as being about trade. This is a deal that focuses on changes in regulatory structures to lock in pro-corporate rules. Using a "trade" agreement provides a mechanism to lock in rules that it would be difficult, if not impossible, to get through the normal political process...the U.S. and European drug companies face a serious threat in the developing world. If these countries don't enforce patents in the same way as we do, then the drugs that sell for hundreds or thousands of dollars per prescription in the U.S. may sell for $5 or $10 per prescription in the developing world. With drug prices going ever higher, it will be hard to maintain this sort of segmented market. Either people in the U.S. will go to the cheap drugs or the cheap drugs will come here.

For this reason, trade deals like the TPP, in which they hope to eventually incorporate India and other major suppliers of low cost generics, can be very important. The drug companies would like to bring these producers into line and impose high prices everywhere. (Yes, we need to pay for research. And yes, there are far more efficient mechanisms for financing research than government granted patent monopolies.)

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There are many other areas where industry groups are seeking special treatment along these lines. No, I can't give a list with links because the draft text is a secret. Public Citizen's website probably is the best source available. It includes the chapter on intellectual property that was obtained through Wikileaks...Krugman is on the money in his assessment of the impact of the TPP on trade. But the point is that the TPP is not really about trade, it's about changing the regulatory process in ways that would almost certainly be opposed by the people in most of the countries included in the deal.

http://www.cepr.net/index.php/blogs/beat-the-press/paul-krugman-and-tpp

Krugman: TPP
http://www.democraticunderground.com/10024169463

TPP and IP, A Brief Note

Dean Baker takes me to task over the Trans Pacific trade deal, arguing that it’s not really about trade — that the important (and harmful) stuff involves regulation and intellectual property rights.

I’m sympathetic to this argument; this was true, for example, of DR-CAFTA, the free trade agreement with Central America, which ended up being largely about pharma patents. Is TPP equally bad? I’ll do some homework and get back to you.

http://krugman.blogs.nytimes.com/2013/12/14/tpp-and-ip-a-brief-note/

Interestingly, Obama voted against CAFTA.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00170
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00209