Latest Trade Agreements Are About The Opposite Of Free Trade: Protectionism For Big Business

from the this-is-not-free-trade dept

We’ve been talking a lot about the various big “trade agreements” that are being worked on around the globe — with a major focus on the TPP (Trans Pacific Partnership) and the TTIP (Trans-Atlantic Trade and Investment Pact). These are frequently referred to as “free trade agreements.” But an important point that gets lost in the various debates is that, generally speaking these are not free trade agreements at all. In many ways, they’re the opposite. Free trade is about removing barriers to trade — which are, generally speaking, a good thing. But the simple fact is that for the most part we already have pretty low trade barriers with most of the countries involved in these negotiations. Instead, this is almost entirely about a combination of regulatory arbitrage, and the ability to better move money around by giant multinational companies. The economics comic artist Michael Goodwin did a nice job demonstrating all this in a comic about the TPP a while back. Here’s just two panels, though I highly recommend the whole thing:

Economist Dean Baker has a good article describing this in more detail as well, showing that these agreements aren’t about “free trade” at all. As he notes, basic free trade generally makes sense. But, that’s not what’s really being discussed in these agreements:

In TPP and TTIP we are not talking about the textbook trade story. The actual trade barriers between the United States and the countries in these deals, with few exceptions, are already quite low. This means that there is little to be gained by lowering them still further.

Instead, he notes — as we have in the past — that these “trade agreements” are really just the opposite. They’re about gifts for certain big businesses that they couldn’t get through legislation:

TPP and TTIP are about getting special deals for businesses that they would have difficulty getting through the normal political process.

He lists out a bunch of examples, but here are a couple we’ve been focused on:

The pharmaceutical industry and entertainment industries will get longer and stronger patent and copyright protection.

Note how this is the opposite of true free trade. Longer and stronger copyrights and patents are actually barriers to trade. They’re putting up regulatory barriers to the free flow of information, protecting certain legacy businesses at the expense of innovative firms. And, it’s all done in secret, with basically only input from businesses. The only time voters actually get to see what’s in it is when it’s a done deal, and fully negotiated. At that point, the parties are too committed to actually allow any fixes that protect consumers or innovation.

So, when you hear people talking about these agreements as if they’re “free trade” agreements, just recognize that calling them free trade agreements is a lie — and it’s a lie that’s used to convince the gullible that these agreements must be good for the economy. And it appears to work on some people:

As Thomas Friedman once famously said in reference to his support of CAFTA, “I didn’t even know what was in it. I just knew two words: free trade.” Others in the media may be too sophisticated to express themselves so bluntly, but undoubtedly most share Friedman’s view. Under such circumstances, there will be few politicians prepared to stand up for principle or their constituents and vote against the pacts regardless of what it is in them.

In short: people (correctly) believe that free trade is generally a good thing. Businesses recognize this — and even though we generally have an awful lot of free trade around the globe these days, with fewer and fewer tariffs and trade barriers, governments are working on “free trade deals” because they know by calling them that, people will often support them, believing blindly that they’re good things. Instead, there’s very little that’s actually about free trade, and an awful lot that’s about propping up and protecting legacy business models, while stifling the important free flow of information.

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Comments on “Latest Trade Agreements Are About The Opposite Of Free Trade: Protectionism For Big Business”

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That One Guy (profile) says:

Honesty in naming

If the problem is the bogus name, might I suggest an alternative, one that more closely matches the real goal of such agreements:

Consumer Protection Elimination Agreements.

Whether it’s undercutting safety regulations, or keeping works away from the public by forcing those writing the laws, under the guise of ‘Complying with our international obligations’, to re-write them in favor of certain industries, the common thread remains the same: removing laws that favor the public, and replacing them with laws that favor private companies and industries.

ECA (profile) says:

The ONLY free trade

The only free trade was having USA corps, have products MADE in other countries and SHIPPED to the USA..
Sometimes put together IN THE USA..

After that, the price of the product was, AS-IF, it was made with GOLD in the USA..

Shipping, handling, distribution, and the CORPS make more money ont he products then the original costs..
MOST of the problems in making things int he USA tends to be 2 things..
Material cost..Materials in the USA are TOP PRICED in the world.
Top managers get wages Equal or greater then the 100 workers below them.. The Top CEO in Japan air, took a wage cut, to earn LESS then his pilots..This will never happen in the USA.

ECA (profile) says:

Re: Re:

20 years ago we started..not the future.
When Corporations raised the money that the Top people get by 100 times, and didnt raise the lower income levels..
Go look at corp wages in the early 1990’s and compare after 2000..
A corp in the USA now, is 10 people getting money, while 1000 people WORK in another country to make the product.
And there is only a few reasons they do it. WE prosecute polluters.
The price of materials in other countries is CHEAPER then in USA..we FORCE prices up when people want something.
Japan STOPPED producing,
Taiwan cut back production,
Others have jumped off of production, because of pollution.
EVEN CHINA is starting to shift…They are going to Africa to do production.

Anonymous Coward says:

The pharmaceutical industry and entertainment industries will get longer and stronger patent and copyright protection.

Let’s be accurate for once. In many foreign countries patent protection for the major pharma companies that heavily invest in developing and creating new drugs is illusory at best and subject to the whims of local politicians who are under the influence of domestic pharma industries. It is not that they will be getting “stronger” protection; it is that they are advocating receiving some measure of rights under local law that resemble protection.

Anonymous Coward says:

Re: Re: Re:

Uh…perhaps because they would like to do business there, and just like our patent laws extend to domestic and foreign companies alike, out domestic companies should receive reciprocal treatment in foreign countries.

Then again, I could be wrong. Perhaps blatant favoritism of domestic companies over foreign companies is a good thing.

Pragmatic says:

Re: Re: Re: Re:

Uh, US pharma companies produce drugs that are researched at universities, etc., so the money from the patent rents is actually spent on marketing.

Look up “Evergreening” when you get a chance. It’s an abuse they want to use these agreements to perpetuate.

Patents on drugs and medical devices are an ABOMINATION and should never have been allowed. The only market for drugs and medical devices is a captive one; they’ve got you over a barrel – you either pay out or suffer and perhaps even die. Meanwhile, this rampant protectionism stifles competition and is one of the reasons I constantly declare that there is no such thing as a free market.

John Fenderson (profile) says:

Re: Re:

Even if a nation is failing to uphold their own laws and this hurts outside investors, why does that fact justify passing agreements that generally harm everyone who isn’t an international investor?

It seems to me that this is the sort of situation that works itself out. If a nation acts unfairly against outside investors, then the outside investors leave the nation. If the nation wants outside investment, they will unilaterally do whatever is needed to attract it.

These “free trade” agreements make no sense at all if that’s the justification for them. The only thing that makes them sensible is if the purpose is to allow multinational corporations to force themselves into nations that don’t really want them, and to protect those multinationals from the repercussions of their own bad behaviors.


Re: They already get more than enough.

Big Pharma has enough of a market here to make up for any “failings” of the rest of the world. New measures are just “icing on the cake” for them. They serve no pragmatic purpose.

I say this as someone that DIRECTLY benefits from crass capitalism in the Pharma sector.

They already make more than enough from me and mine.

Alien Rebel (profile) says:

Re: Re:

Let’s be really, really accurate for once. The entities crying “piracy!” have zero incentive to refrain from going way over the line and turning what they’re selling as benevolent “protection” into commercial weaponry. Wholesale removal of democratic constraints, the ability to suppress competition without that bothersome due-process nonsense, maybe even achieving that holy grail of modern capitalism, getting money for nothing, via Investor State Dispute Resolution? It’s all good to them, baby.

justme says:

Re: Anon Coward defending phar. industry

Were going off topic a bit…

The argument that research and development cost is a justification for allowing monopoly is misguided. I have no problem with a company recovering investment in a new drug but it shouldn’t be in a way that completely remove’s competition from the equation.

A better way would be allowing anyone to manufacture a new drug but add a 5-10% fee for every manufacturer except the patent holder, which is paid to patent holder for there R&D costs. That way they have a 5-10% cost advantage but if they get greedy then other’s will step in to compete!!

Giving them that period of monopoly, has allowed them to drain billions in flat out profit from our healthcare system!

Crusty the Ex-clown says:

Of course it's not about Free Trade...

….it’s about unfettered international labor arbitrage, with the predictable race to the bottom. You could call it The China Price Syndrome. Capitalism suffers a meltdown from rampant greed and breaches the containment vessel in which society had placed it. But no pics on 11PM news – it’s all too abstract to show on teevee and too dull for sound bites. And that suits the powers that be. Let the peons duke it out over racism, abortion, animal rights, the environment, etc., and make sure they pay no attention to the man behind the curtain,

David E.H. Smith says:

TPP; Obama to release full text of Submission to The Supreme Court to 'Tear Down that Wall' of Secrecy in Hope of Faster Passage Thu. Congress?

Higher Taxes (But, No “NEW” Taxes) to Pay Secret TPP Tribunal Penalties; NON Shareholders Have to Pay SHAREHOLDERS, corporate America & ASSOCs., et al.
How Much are You Selling your Right to Sue the Global Corporate Economy for?

“But, WILL CHINA, The Muslim World, et al, SUPPORT PUTIN (BRICS, et al); The WHITE KNIGHT”?

It will be good for, not only the NON shareholders of the enterprises that will be generated by the on-going global “cooperation” of corporate treaties, agreements, partnerships, et al, including the China – Canada Investment Treaty, The Trans Pacific Partnership, the EU – Canada CETA,
for the potential shareholders, as well,
who are quite interested to know if President Xi Jinping (China) will support Russia as a co-member of B.R.I.C.S. when President Putin uses his potential role as “The White Knight”.

And, while President Putin’s potential support as “The WHITE KNIGHT” in the development of the CETAgreement, et al, litigation below can dramatically off-set the hundreds of billions of dollars due to the present & future sanctions leveled by American led, et al, corporations & financial institutions via their governments’ signing their global corporate economic treaties/”arrangements”,
and the potential for making trillions of dollars for the Russian economy over the next 30 – 40 years & beyond,
are the citizens (SHAREHOLDERS & NON shareholders) of Germany & JAPAN just being prudent in wanting to wait for the outcome of:
1) the submission to The SUPREME COURT of CANADA & the highest court in Germany, et al, to make their findings regarding “The Submission”:
“The SHAREHOLDERS & Corporations of AMERICA, et al
the harmless Canadian NON shareholders, et al”?

2) “The MERKEL (Chanc. Germ.) Letter; To Sue, or, Be Sued”?
(see; )

Have the federal representatives of the nations that are the potential signatories of CETA, TPP, et al, willingly provided the NON shareholders of China, Canada, Europe, the Trans Pacific nations, et al, with the aforementioned information? Are the federal representatives, et al, depriving the NON shareholders of Canada, et al, of the due diligence information that enables the family of the NON shareholders of Canada, et al, to make informed decisions regarding their financial planning?

And, would a reasonable person conclude by a preponderance of the evidence, &/or, beyond a reasonable doubt, that these documents, et al, demonstrate that the SHAREHOLDERS of AMERICA, CANADA , the EU & Trans Pacific nations, et al, really do not care which NON shareholders pay them the punitive penalties, etc., by way of their secret (“Death-Star Chamber”) TRIBUNALS, as long as its not the SHAREHOLDERS who pay & not their corporations regardless of which country the corporations:
1) operating from,
2) maintain their headquarters,
3) use to do their cyber banking, accounting, “taxation”, etc.
4) et al?

And, re; the CHINA – Canada Investment Treaty, is it understandable why the “coveted” Hong Kong investor & his associates are “concerned” with the aforementioned findings of The SUPREME COURT of CANADA, et al, & the effects of the findings, et al, on the EU, AMERICA, the Trans Pacific nations, et al, treaties with CHINA, et al?

In regard to arms sales; how about the sale of arms (non nuclear) in general in regard to the “trade” treaties that are continuing to be secretly negotiated and how will the Tribunals, both; B.R.I.C.S. & non BRICS, adjudicate, decide & penalize the NON SHAREHOLDERS for the sale of legitimate, semi- legitimate & “illegal” sales of arms within the signatories nations & the those of others, &/or, unaligned? Of particular, interest is China, which does have an treaty with Canada, which puts China “at odds” with other arms manufacturing & nuclear powers that it (China) does not have any “arrangements” with.
Are these types of questions that your politicians & the corporate lobbyists calls “forget-me-nots” (“Buyer Beware”) that will be (maybe) worked out after the fast tracked signatures are obtained?

And, what do you think is the significance of the line in The Submission to The Supreme Court of Canada “…And, lest one forgets that the revelation of the present perilous international treaties/”arrangements” began with the regard for the rights of Native Canadians as per the Treaties/”arrangements” that corporate Canada & the Government of Canada have “foisted” upon Native Canadians…”? What are the various ways that this line will cost the SHAREHOLDERS, et al?

On the other hand, it may be worth repeating yet again,
“What the TREATY of VERSAILLES was to the 20th century PALES in COMPARISON to the TPP, CETA, C-CIT, NAFTA, et al, in the 21st”.

And, how will YOUR submission to YOUR highest court IMPROVE upon The Submission that is presently before The Supreme Court of Canada?

David E.H. Smith
– Researcher
– “Qui tam…”
Please consider sharing the enclosed information & questions with 10 members of your family, friends, associates in order that they can use the due diligence info to make more informed decision about their families’ financial planning, & then they can share it with 10 others…
For more Information & Questions re; The Relationship between Human (Nature) Rights & Economics by way of the C-CI Treaty, the CET Agreement,
TPP, et al, and The WAD Accord

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