Negotiations for the TPP agreement should be abandoned

1) Trade Wars TPP is a free trade agreement that works to inhibit protectionist economic policies. One specific anti-protectionist aspect the U.S. is pushing for would restrict the ability of state-owned enterprises to distort market conditions in pursuit of trade objectives. Protectionism leads to trade wars- empirics prove. When the Smoot Hawley act raised tariffs in the U.S. in 1930, a wave of reactionary tariffs instated by other countries cause U.S. trade to drop by 50%[4]. Trade wars create economic dead weight loss and inhibit economic growth for all parties. Protectionist policies in the 1930’s greatly contributed to the Great Depression [4]. Trade wars create tension in international relations that can lead to real wars or undermine political goodwill during diplomatic negotiations. A study of 10,000 country pairs from 1870-1997 showed that healthy trade relations reduced the likelihood of war by 50%[7]. 2) U.S. Hegemony Asia is booming in terms of economic and political power. Multiple Asian free trade agreements are creating regional integrations that exclude the U.S., undermining U.S. leadership [5]. Now is a crucial time to cement the U.S. place in regional economic architecture; failure to act now risks missing the boat- future Asian trade opportunities will permanently shift away from the U.S.[3] The TPP ensures a strong U.S. economic and geopolitical presence in Asia. The U.S. is the largest economy in the TPP, allowing significant leverage in shaping the agreement. Participation in TPP boosts favorable perception of the US by Asian countries and strengthens trade ties [3]. U.S. Hegemony is key to global stability, particularly in the Pacific Rim. Multiple flashpoints for conflict such as the Korean peninsula, the South Chinese Sea, and Taiwan mean that likelihood of war is high without a Hegemonic presence. Specifically, the growing geopolitical power of China creates a very scenario for nuclear war. As China looks to overtake the U.S., conflicts will arise. For example, currently China maintains the right to use force in disputes involving Taiwan while the U.S. denies this right and sells arms to Taiwan for its defense. Taiwan exists as a symbol of power and is prime real estate for a US-Sino proxy war. Such a war has the potential to spill over into all-out war between nuclear superpowers. The TPP prevents US-Sino war by preventing the decline of US influence in the Pacific Rim and strengthening the U.S. strategic position relative to China. 3) Economy We can talk all day about oddities of international trade and where New Zealand gets its milk, but the data is clear: globalization has unambiguously improved the economic prospects of nearly everyone in the world. The stats: “world poverty rates have fallen by 80% from 0.268 in 1970 to 0.054 in 2006. The corresponding total number of poor has fallen from 403 million in 1970 to 152 million in 2006… measures of global welfare increased by somewhere between 128% and 145%.” [1]. We are in an era of unprecedented global economic growth, and studies show that incomes of the poor rise 1-to-1 with overall economic growth [8]. This economic growth is due to opening of markets and free trade. Studies of international economies during the 70’s and 80’s found that those with open trade relations grew at a rate six times greater than those with closed. [8] The TPP exists as a starting point for broader free trade agreements like the FTAAP [3]. Such an agreement would involve 40% of U.S. trade and would yield a $200 billion increase in exports.[5] The TPP offers tremendous economic benefits to its members. The China job-loss scenario described by Pro is the result of currency manipulation, which is a protectionist policy. This sort of government manipulation of trade markets is exactly what the TPP prevents. Trade isn’t zero-sum; open markets create efficient allocation of resources so that everyone benefits. Pro illustrates this in his example about cheap Chinese goods and loss of U.S. manufacturing: efficient resource allocation means that China now has manufacturing jobs and the U.S. gets affordable iPods. The U.S. labor market will then adjust accordingly to replace those manufacturing jobs. The U.S. manufacturing sector has historically benefitted from free trade. Manufacturing under NAFTA has resulted in a trade surplus; U.S. has a globally competitive manufacturing sector.[5] The dead weight loss from protectionist policies has real impact on quality of life. Buy American provisions mandate U.S. steel on public works projects unless U.S. steel is 25% more expensive. This effectively raises the cost of public works projects by 25%, which can make or break a project budget. The dead weight loss from this policy manifests itself in unbuilt bridges and water treatment facilities. Globalized prices are actually more stable than local prices because a diversified market is better able to absorb local disruptions. This is just the common sense of not putting all your eggs in one basket. Pro gives no evidence that world prices are more volatile. Pro’s capital outflow argument has no evidence to back it up and makes no sense. Japan definitely reinvests the money it gets from trade surplus. 4) Social Cost Pro offers no evidence of a race to the bottom. Actual economic research finds no evidence of an increase in inequality due to international trade or of a widening of rich/poor gap [2]. Pro’s argument is empirically denied. Multiple free trade arguments exist in democratic countries with no signs of a race to the bottom. NAFTA didn’t turn Canada into a corporatist dystopia. The existing TPP agreement between P-4 countries contains agreements to promote sound labor and environmental policies and prohibits countries from using these policies for protectionist purposes [3]. This turns the case: TPP explicitly prevents race to the bottom. Economic studies correlate development to decrease in Human Rights violations [6] The TPP still allows for domestic laws that acknowledge externalities like environmental costs. The EPA will still exist once the U.S. ratifies TPP and non-ratification won't create regulation where it doesn't already exist. Comparative advantage is real and it is how resources are allocated efficiently. Industries will always face collapse if they don’t stay competitive- protectionist policies simply prop up failing industries in the face of an evolving world rather than swimming with the current and evolving with the world. 5) Corporate Structure Pro is just plain wrong that only megacorporations are involved overseas. Small and medium-sized enterprise (SME) make up 97% of all importers and exporters in the U.S. [5] In reality it is megacorporations that benefit the most from protectionism. Only large companies have the political access needed to influence governmental policy. Additionally, only large companies can overcome trade barriers more easily by establishing foreign subsidiaries.[5] 6) Other Stuff? Negotiations between heads of state are obviously secret, but eventually the agreement will be public and will have to be ratified by elected officials. Pro gives no reason why we any of the stuff he mentioned is bad. Internet agreements are needed to allow SME’s to easily access overseas markets. [1] http://papers.nber.org... [2] http://www.imf.org... [3] http://www.fas.org... [4] http://en.wikipedia.org... [5] http://www.brookings.edu... [6] http://gwbweb.wustl.edu... [7] http://wikileaks.org... [8] https://www.wto.org... [9] http://intelligencesquaredus.org...