Monday, July 4, 2016

Cato Says 17 of 22 Chapters of the Trans-Pacific Partnership Examined Are Neutral to Negative With Regard To Free Trade, But....

...they endorsed TPP anyway.

Daniel Ikenson, director of Cato’s Herbert A. Stiefel Center for Trade Policy Studies, writes:
Some issues simply don’t belong in trade agreements.  But in our view every little bit of liberalization helps, and as long at it doesn’t come at a cost that exceeds the benefits, it is worthy of support. The bottom line is that, in our assessment, the TPP would be net liberalizing – it would, on par, increase our economic freedoms.  I hope it will be ratified and implemented as soon as possible.
TPP is a mixed bag of liberty and coercion. It is not disputed, even by Cato, that it increases coercion against trade in some areas. The TPP agreement is 5,500 pages long. This is approximately 5,499 pages more than what a true free trade agreement would look like.

A free trade agreement would need one page which would say:
Go forth and trade.
Since  Cato tells us that 5 chapters of TPP actually increase restrictions on trade, it is extremely difficult to give a full-throated endorsement  of TPP from a libertarian perspective. TPP is backroom globalism.

 Ikenson's claim that TPP does not result in costs exceeding benefits is simply a claim that can not be supported using proper methodology. There can be no interpersonal comparisons of utility, ever, to achieve such cost-benefit analysis. Further, even if one could make interpersonal utility comparisons,  Ikenson must assume that adding costs to one person for the benefit of others can be justified. It certainly can't on pure libertarian grounds.

But, more concerning, when it comes to TPP, we are not talking about peanut butter trade here.

There are some particularly horrific limits in TPP to trade, as indeed Cato reports:

The Textiles and Apparel chapter is explicitly restrictive and
intended to manage supply chain relationships, while ensuring that
the gains from trade are distributed in a political, rather than
economic, manner. The TPP’s restrictive rules for textile and
apparel trade continue a long tradition of managed trade and
should raise questions about why an 18th century industry warrants
such protection in a 21st century agreement.


[Chapter 6] seems to be
to ensure that TPP brings no liberalization
to the U.S. antidumping, countervailing
duty, or safeguard regimes. It accomplishes
that objective by specifying that each
country retains its rights under the WTO to
invoke measures under those laws. In
addition, the chapter avails the parties of
new forms of protectionism by providing a
“transitional safeguard measure,” which
could be used to increase tariffs on imports
included those not found to be “unfairly”


Labor chapters in trade agreements do
not promote liberalization. They are
designed to increase regulation of
foreign labor practices. While there may
be a political argument for including
them in trade agreements, there is no
economic rationale.

In the TPP, labor protections have been
pushed even further. While much of the
TPP labor chapter simply borrows from
earlier agreements, with commitments
to follow certain rights set out in the
ILO Declaration and an obligation to
“effectively enforce” domestic labor
laws, the TPP goes beyond traditional
labor chapters in a number of ways,
including by requiring that parties
“adopt and maintain statutes and
regulations” with respect to minimum

Oh yeah, helluva a "free trade"agreement that calls for minimum wages laws that will surely make many unemployable. That's pure evil. One wonders what Ikenson views as the "benefit" that counters this.


1 comment:

  1. How far, indeed, CATO has fallen. I believe that it was Milton Friedman who cautioned that the CATO move to D.C. from San Francisco would prove corrupting. Right again, Milton.