It's amazing what some folks will say to promote trade agreements. Today, John Harwood in the NYT gave us the theory of immaculate trade pact conception. In this view trade pacts are negotiated by members of the high priesthood who focus on promoting the overall national interest and economic growth. Unfortunately, these pacts must deal with the evils of everyday politics.
In this respect he tells of the urgent need for fast-track (a.k.a. "trade promotion") trade authority:
"Presidents value the Trade Promotion Authority because it forces Congress to vote up or down on trade deals, shielding them from House and Senate amendments at the behest of corporations, unions, environmental groups or other interests."
In reality these deals were being negotiated by corporate interests from day one. The U.S. trade negotiators are working hand in hand in with the pharmaceutical industry, the software industry, the financial industry, the oil and gas industry, and other major corporate interest groups to craft a deal that will increase their profits. Economic growth has nothing to do with it. Even the models used to tout the benefits of these deals show gains that are too small to be measured in annual GDP data. And these growth estimates don't even take account of the negative impact that stronger patent and copyright monopolies, and the resulting prices increases, would have on growth. The idea that these trade deals are about promoting growth is a story for little kids and reporters at major news outlets.
Of course it is possible to craft a trade deal that would promote real economic gains. Doctors in the United States earn salaries that are hugely out of line with those in other wealthy countries. The same is true for other highly paid professions. If a trade deal focused on reducing the barriers that prevent these professionals from providing their services in the United States the gains would be substantial. The savings on doctors alone could be close to $100 billion a year (0.6 percent of GDP).
The agreements could also focus on reducing the value of the dollar, which would make our goods and services more competitive internationally. This would lower our trade deficit and potentially create millions of jobs. And, we could reduce patent and copyright barriers, lowering prices and making markets more competitive.
But these items don't come up at trade negotiations because the folks at the table would lose from these growth enhancing measures. Instead we get silly stories about trade pacts being negotiated by disinterested parties who are only looking out for the good of the country. Come on folks, you've got to do better than this.
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