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December 12th, 2013

Krugman Misses the TPP Forest for the Tariff Trees

By Mitch Jones

In a new blog post Paul Krugman claims he hasn’t, “seen anything to justify the hype, positive or negative,” about the Trans Pacific Partnership, or TPP.

His argument basically boils down to this claim: “most conventional barriers to trade — tariffs, import quotas, and so on — are already quite low, so that it’s hard to get big effects out of lowering them still further.”

While this is largely true, the problem with the TPP isn’t really the tariffs and quotas, although nearly 80 tariffs lines for seafood will be reduced or eliminated by the deal. After all, of the 29 titles in the deal, only a handful are said to deal with these issues. So, while Dr. Krugman is “having a hard time figuring out why this deal is especially important,” it may be because he has been focusing on the wrong areas.

As I’ve mentioned before, the truly frightening aspect of the TPP isn’t the reduction of tariffs or the lifting of quotas, it’s the big target placed on “technical barriers to trade.” These “barriers” are the “regulations, standards, testing and certification procedures” put in place by federal, state, and local governments to protect things like public health and the environment.

One of the ways these so-called barriers will be dealt with is by “harmonizing” them across the countries involved in the TPP. But “harmonization” will lead to reducing them to the lowest common denominator, not raising all standards to the highest.

Even worse, our government is pushing to include an Investor-State Dispute Resolution provision in the deal. This would allow foreign corporations, or the foreign subsidiaries of U.S. corporations, to directly challenge these “barriers” in an international trade tribunal. We’ve seen this at work already in NAFTA, under which a natural gas company is suing Quebec for $250 million for lost profits because of Quebec’s fracking moratorium. We can count on corporations using this provision to sue state and local governments in the U.S. for fracking bans, over labeling GMOs, and buying locally sourced food for our schools and hospitals.

This is what the “hype” is all about. It’s about a so-called trade deal that isn’t about tariffs and quotas, but about giving corporations more power and more ways to challenge laws and regulations they disagree with. It’s too bad Paul Krugman can’t see that.




One Comment on Krugman Misses the TPP Forest for the Tariff Trees

  1. Coral Bright says:

    Thank you for making it clear what TPP is really about. Seems it was secretive for quite a while!

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