Globalization is a positive and powerful force for good, if it is embedded in the right kind of ethical and legal framework. Yet the current draft of the Trans-Pacific Partnership is not worthy of a simple thumbs-up by the Congress. Without jettisoning the purported goals of TPP, the 12 signatories should slow down, take the pieces of this complex trade agreement in turn and work harder for a set of international standards that will truly support global sustainable development.
The TPP should be judged on whether it guarantees global economic well-being, not whether it gives advantages to the United States to the detriment of other countries. The ultimate goal of economic policy should be to raise the well-being of all parts of society, including the poor and middle class. Agreements that help the rich at the expense of the poor, capital at the expense of labor, or particular sectors at the expense of consumers should be viewed with skepticism.
The Obama administration surely negotiated the TPP in good faith, and the accord would likely add to global and U.S. economic growth. This is not a pernicious accord, the fruits of a secret cabal as some have feared. Nor is globalization an evil to be fought tooth and nail. The sad truth, however, is that while the administration promised a 21st-century agreement, we have yet another late 20th-century agreement. And we already know the likely results: economic growth at the expense of widening income inequality; excessive power of big pharma, big finance and other sectors with strong lobbying power; and the growing threats of negative-sum trade conflict with China.
The agreement, with its 30 chapters, is really four complex deals in one.
The first is a free-trade deal among the signatories. That part could be signed today. Tariff rates would come down to zero; quotas would drop; trade would expand; and protectionism would be held at bay.
The second is a set of regulatory standards for trade. Most of these are useful, requiring that regulations that limit trade should be based on evidence, not on political whims or hidden protectionism.
The third is a set of regulations governing investor rights, intellectual property and regulations in key service sectors, including financial services, telecommunications, e-commerce and pharmaceuticals. These chapters are a mix of the good, the bad and the ugly. Their common denominator is that they enshrine the power of corporate capital above all other parts of society, including labor and even governments.
The fourth is a set of standards on labor and environment that purport to advance the cause of social fairness and environmental sustainability. But the agreements are thin, unenforceable and generally unimaginative. For example, climate change is not even mentioned, much less addressed boldly and creatively.