{"id":40345,"date":"2014-03-03T12:00:38","date_gmt":"2014-03-03T12:00:38","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=40345"},"modified":"2015-05-05T22:11:01","modified_gmt":"2015-05-05T21:11:01","slug":"no-big-deal","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2014\/03\/no-big-deal\/","title":{"rendered":"No Big Deal"},"content":{"rendered":"

Everyone knows that the Obama administration\u2019s domestic economic agenda is stalled in the face of scorched-earth opposition from Republicans. And that\u2019s a bad thing: The U.S. economy would be in much better shape if Obama administration proposals like the American Jobs Act<\/a> had become law.<\/p>\n

It\u2019s less well known that the administration\u2019s international economic agenda is also stalled, for very different reasons. In particular, the centerpiece of that agenda \u2014 the proposed Trans-Pacific Partnership, or T.P.P. \u2014 doesn\u2019t seem to be making much progress, thanks to a combination of negotiating difficulties abroad and bipartisan skepticism at home.<\/p>\n

And you know what? That\u2019s O.K. It\u2019s far from clear that the T.P.P. is a good idea. It\u2019s even less clear that it\u2019s something on which President Obama should be spending political capital. I am in general a free trader, but I\u2019ll be undismayed and even a bit relieved if the T.P.P. just fades away.<\/p>\n

The first thing you need to know about trade deals in general is that they aren\u2019t what they used to be. The glory days of trade negotiations \u2014 the days of deals like the Kennedy Round of the 1960s<\/a>, which sharply reduced tariffs around the world \u2014 are long behind us.<\/p>\n

Why? Basically, old-fashioned trade deals are a victim of their own success: there just isn\u2019t much more protectionism to eliminate. Average U.S. tariff rates have fallen<\/a> by two-thirds since 1960. The most recent report<\/a> on American import restraints by the International Trade Commission puts their total cost at less than 0.01 percent of G.D.P.<\/p>\n

Implicit protection of services \u2014 rules and regulations that have the effect of, say, blocking foreign competition in insurance \u2014 surely impose additional costs. But the fact remains that, these days, \u201ctrade agreements\u201d are mainly about other things. What they\u2019re really about, in particular, is property rights \u2014 things like the ability to enforce patents on drugs and copyrights on movies. And so it is with T.P.P.<\/p>\n

There\u2019s a lot of hype about T.P.P., from both supporters and opponents. Supporters like to talk about the fact that the countries at the negotiating table comprise around 40 percent of the world economy<\/a>, which they imply means that the agreement would be hugely significant. But trade among these players is already fairly free, so the T.P.P. wouldn\u2019t make that much difference.<\/p>\n

Meanwhile, opponents portray the T.P.P. as a huge plot, suggesting that it would destroy national sovereignty and transfer all the power to corporations. This, too, is hugely overblown. Corporate interests would get somewhat more ability to seek legal recourse against government actions, but, no, the Obama administration isn\u2019t secretly bargaining away democracy.<\/p>\n

What the T.P.P. would do, however, is increase the ability of certain corporations to assert control over intellectual property. Again, think drug patents and movie rights.<\/p>\n

Is this a good thing from a global point of view? Doubtful. The kind of property rights we\u2019re talking about here can alternatively be described as legal monopolies. True, temporary monopolies are, in fact, how we reward new ideas; but arguing that we need even more monopolization is very dubious \u2014 and has nothing at all to do with classical arguments for free trade.<\/p>\n

Now, the corporations benefiting from enhanced control over intellectual property would often be American. But this doesn\u2019t mean that the T.P.P. is in our national interest. What\u2019s good for Big Pharma is by no means always good for America.<\/p>\n

In short, there isn\u2019t a compelling case for this deal, from either a global or a national point of view. Nor does there seem to be anything like a political consensus in favor, abroad or at home.<\/p>\n

Abroad, the news from the latest meeting of negotiators<\/a> sounds like what you usually hear when trade talks are going nowhere: assertions of forward movement but nothing substantive. At home, both Harry Reid<\/a>, the Senate majority leader, and Nancy Pelosi<\/a>, the top Democrat in the House, have come out against giving the president crucial \u201cfast-track\u201d authority, meaning that any agreement can receive a clean, up-or-down vote.<\/p>\n

So what I wonder is why the president is pushing the T.P.P. at all. The economic case is weak, at best, and his own party doesn\u2019t like it. Why waste time and political capital on this project?<\/p>\n

My guess is that we\u2019re looking at a combination of Beltway conventional wisdom \u2014 Very Serious People always support entitlement cuts and trade deals \u2014 and officials caught in a 1990s time warp, still living in the days when New Democrats tried to prove that they weren\u2019t old-style liberals by going all in for globalization. Whatever the motivations, however, the push for T.P.P. seems almost weirdly out of touch with both economic and political reality.<\/p>\n

So don\u2019t cry for T.P.P. If the big trade deal comes to nothing, as seems likely, it will be, well, no big deal.<\/p>\n

___________________________<\/p>\n

Paul Krugman<\/i> joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University. He has taught at Yale, MIT and Stanford. He is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. In 2008 Mr. Krugman received the Nobel Prize in Economics.<\/i><\/p>\n

A version of this op-ed appears in print on February 28, 2014, on page A23 of the New York edition with the headline: No Big Deal. <\/i><\/p>\n

Go to Original \u2013 nytimes.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s far from clear that the T.P.P. is a good idea. The first thing you need to know about trade deals is that they aren\u2019t what they used to be. The glory days of trade negotiations are long behind us. Why? Basically, old-fashioned trade deals are a victim of their own success: there just isn\u2019t much more protectionism to eliminate.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[105],"tags":[],"class_list":["post-40345","post","type-post","status-publish","format-standard","hentry","category-nobel-laureates"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/40345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=40345"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/40345\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=40345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=40345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=40345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}