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Home Publications Blogs Beat the Press NYT Runs Propaganda Piece to Promote Europe-U.S. Trade Deal

NYT Runs Propaganda Piece to Promote Europe-U.S. Trade Deal

Tuesday, 15 January 2013 05:43

The NYT ran a news article promoting a trade agreement between the United States and the European Union. The article wrongly referred to the trade deal as a "free trade" agreement three times. The agreement is almost certain to include greater restrictions on intellectual property. These restrictions are forms of protection, they are the opposite of free trade. It would have been possible to both make the piece more accurate and save space by leaving out the word "free."

It also told readers that European leaders:

"have argued that a free-trade deal would be both a cheap and a relatively painless way to stimulate growth. ...

"Richard Bruton, the Irish minister for jobs, enterprise and innovation, said in a statement that a trade deal could lift the E.U. economy by €120 billion, or $160 billion, per year and the U.S. economy by $100 billion."

The piece provides no clear context for these numbers, nor does it make it clear that these are one time gains that are projected to be realized over a substantial period of time. (Most of the terms in any agreement will be phased in over time.) These gains come to about 0.7 percent of GDP for the U.S. and 0.9 percent of GDP for the EU. Assuming it takes ten years to achieve them, the projections imply that the deal will increase growth in the U.S. by roughly 0.07 percentage points and in the EU by 0.09 percentage points.

This increment to growth will barely be noticeable and will have a minimal impact on employment. If the EU leaders are looking to this deal as a source of stimulus, as the article asserts, then they have a very poor understanding of economics.



Comments (2)Add Comment
IP....European issues?
written by pete, January 15, 2013 8:44
I don't think Europe has the same relative IP issues as Asia. I.e., I think IP is already well protected there, so that should not really be part of the discussion at all. With Asia, IP rights do not exist in some places, effectively it not legally, so it is a huge issue. The critical issue would be labor movement. We could, e.g., normalize health care costs by having underpaid european health care workers come to the U.S. and lower our health care costs.
written by Lrellok, January 17, 2013 4:28
Pete, i have two words for you; "Generic Drugs". European socialized medicine completely ignores US drug patents and uses generic drugs to control costs. That is why europe is paying a fraction of what the US pays per capita for healthcare. This idea is a handful of rightwing reactionaries trying to backdoor kill their countries own social programs. If the EU had to buy drugs at US prices, their government healthcare programs would collapse overnight. Which, given statements made by Mirkel and Camaron, is quite possibly the point.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.