<html>
<head>
<meta http-equiv="content-type" content="text/html; charset=ISO-8859-1">
</head>
<body text="#000000" bgcolor="#FFFFFF">
<p>[I am not sure that it can be said that Dean is anti-American,
more like Lincoln or Jefferson who said, dissent is the highest
form of patriotism! And Dean is one of the few economists who had
an analytic to predict the crisis (not in timing of course, but
that it was imminent). Most other economists relying on different
analytics came up short, doing euclidean geometry in a
non-euclidean world... but these kind of free trade arguments are
perfectly understandable not because of their theoretical
robustness but because economists pursuing their self-interest by
selling pro-BigCorporate ideas because this makes money for them,
gets them prestige, and it need not be right, merely plausible...
]<br>
</p>
<p><b>United States: Political corruption and the "free trade"
racket</b></p>
<p> By Al Jazeera/Dean Baker*, Washington DC, 6 May 2013</p>
<p> </p>
<p> In polite circles in the United States, support for free trade
is a bit like proper bathing habits. It is taken for granted. Only
the hopelessly crude and unwashed would not support free trade.</p>
<p> There is some ground for this attitude. Certainly, the United
States has benefited enormously by being able to buy a wide range
of items at lower cost from other countries.</p>
<p> However, this doesn't mean that most people in the country have
always benefited from every opening to greater trade. And it
certainly doesn't mean that the country will benefit from
everything that those in power label as "free trade."</p>
<p> That is the story we are seeing now as the Obama administration
is pursuing two major "free trade" agreements that in fact have
very little to do with free trade and are likely to hurt those
without the money and power to be part of the game.</p>
<p> The deals in question, the Trans-Pacific Partnership (TPP) and
the US-European Union "Free Trade" Agreement are both being pushed
as major openings to trade that will increase growth and create
jobs.</p>
<p> In fact, eliminating trade restrictions is a relatively small
part of both agreements, since most tariffs and quotas have
already been sharply reduced or eliminated.</p>
<p> <b>Rather, these deals are about securing regulatory gains for
major corporate interests. In some cases, such as increased
patent and copyright protection, these deals are 180 degrees at
odds with free trade. They are about increasing protectionist
barriers.</b></p>
<p> <b>All the arguments that trade economists make against tariffs
and quotas apply to patent and copyright protection.</b></p>
<p> <b>The main difference is the order of magnitude. Tariffs and
quotas might raise the price of various items by 20 or 30
percent. By contrast, patent and copyright protection is likely
to raise the price of protected items 2,000 percent or even
20,000 percent above the free market price.</b></p>
<p> Drugs that would sell for a few dollars per prescription in a
free market would sell for hundreds or even thousands of dollars
when the government gives a drug company a patent monopoly.</p>
<p> In the case of drug patents, the costs go beyond just dollars
and cents. Higher drug prices will have a direct impact on the
public's health, especially in some of the poorer countries that
might end up being parties to these agreements.</p>
<p> There are also a wide variety of regulatory issues that are
being pursued through these agreements in large part because there
would be difficulty getting them accepted through the normal
political process.</p>
<p> <b>For example, the sort of government-mandated Internet
policing that was part of the shipwrecked Stop Online Piracy Act
is likely to reappear in one or both agreements.</b></p>
<p> It is also likely that rules that limit the power of governments
to restrict fracking could be in the agreements.</p>
<p> Such rules could prohibit not only the federal government, but
also state or county governments, from imposing restrictions
designed to protect the public's health.</p>
<p> These are the sorts of restrictions that may appear in the TPP
and US-EU Free Trade Agreement.</p>
<p> The reason for using tentative language is that none of the
specifics of the deal have yet been made public. The Obama
administration is negotiating these pacts in secret.</p>
<p> It has made almost nothing about the negotiating process public
and has shared none of the proposed text with the relevant
committees in Congress. (Public Citizen has posted information on
the TPP based on leaked documents.)</p>
<p> <b>Incredibly, it has shared portions of the proposed TPP with
the relevant industry groups.</b></p>
<p> While elected representatives in Congress may not be able to
find out anything about proposed rules on drug patents or
restrictions on fracking, Pfizer and Merck will have the
opportunity to weigh in on patent rules and the major oil and gas
companies will help to draft language on fracking that serves
their interests.</p>
<p> The idea is that once a deal is completed there will be enormous
political pressure for Congress to approve it no matter what it
contains.</p>
<p> In addition to the campaign contributions that supporters of the
deals will get from the special interest groups who stand to
benefit, news outlets like the Washington Post will use both their
news and opinion sections to bash members of Congress who oppose a
deal. They will be endlessly portrayed as ignorant Neanderthals
who do not understand economics.</p>
<p> The reality, of course, is that it is the "free traders" who
either do not understand economics or deliberately choose to
ignore it.</p>
<p> Many of the provisions that we are likely to see in these deals,
like stronger patent protections, will slow growth and cost jobs.</p>
<p> These deals will also lead to more upward redistribution of
income. The more money that people in the developing world pay to
Pfizer for drugs and Microsoft for software, the less money they
will pay for the products that we export, as opposed to
"intellectual property rights."</p>
<p> These payments are great if you own lots of stock in drug or
software companies, but for the vast majority of the nation's
workers who are not big stockholders, extracting money from people
in the developing world for these corporate giants is not good
news.</p>
<p> This is yet another case where the government is working for a
tiny elite against the interests of the bulk of the population.
And it is doing it in a way that would be difficult to caricature:
making powerful corporate interests direct negotiating partners,
while excluding democratically-elected representatives from the
process.</p>
<p> It is tempting to say that Washington couldn't get more corrupt,
but it probably will.</p>
<p> </p>
<p> [* Dean Baker is a macro-economist and founder and co-director
of the Center for Economic and Policy Research (CEPR). This
article was first published on Al Jazeera English, and is
republished with permission of the author and acknowledgements.
<a class="moz-txt-link-freetext" href="http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/political-cor">http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/political-cor</a>
ruption-and-the-qfree-tradeq-racket and
<a class="moz-txt-link-freetext" href="http://www.aljazeera.com/indepth/opinion/2013/04/201342954234869993.html">http://www.aljazeera.com/indepth/opinion/2013/04/201342954234869993.html</a>
]</p>
</body>
</html>