Trans-Pacific Partnership and US European Union free trade
Via Naked Capitalism comes more comment on two major global trade agreements also discussed here at Angry Bear. I keep wondering when our national conversation will get around to acknowledging ‘pro-business’ as having a second question to answer: which businesses mostly benefit and which lose out? And a third: what are the rules of free trade this time?
It’s a sign of the times that a reputable economist, Dean Baker, can use the word “corruption” in the headline of an article describing two major trade deals under negotiation and no one bats an eye.
By way of background, the Administration is taking the unusual step of trying to negotiate two major trade deals in the same timeframe. Apparently Obama wants to make sure his corporate masters get as many goodies as possible before he leaves office. The Trans-Pacific Partnership and the US-European Union “Free Trade” Agreement are both inaccurately depicted as being helpful to ordinary Americans by virtue of liberalizing trade. Instead, the have perilous little to do with trade. They are both intended to make the world more lucrative for major corporations by weakening regulations and by strengthening intellectual property laws.
Baker describes in scathing terms why these types of deals are bad policy:
…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.
All the arguments that trade economists make against tariffs and quotas apply to patent and copyright protection. 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. 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…
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….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.
In the investor-state system, whereby trans-national corporations- ‘investors,’ are given rights which transcend that of the nations in which they operate. trans-national corporations are obligated to act contrary to the interests of any and every nation, to pollute and trample sovereignty, to exploit workers and violate public well being as long as it increases profits. According to Milton Friedman: http://anamecon.blogspot.com/search/label/Milton%20Friedman
“there is one and only one social responsibility of business–to use it(s) resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
Simply, they have no social responsibilities to any society. The caveat, ‘engages in open and free competition without deception of fraud,’ is nonsense, a fob for fools. It is cast aside by corporations at the first opportunity to manipulate competition and the system, and deceive. It must be, because corporations must compete with other corporations that are prepared to do the same thing.
Transnational corporations cannot be citizens of any nation. They cannot be expected to act in good faith, if by acting in bad faith, if by manipulation of law and the system, they can secure greater profits. Corporations are predators, and the citizens and governments of all nations are their prey. Governments of all nations must beware, if they are to secure be blessings of liberty and prosperity for their citizens.
“12 Latin American governments have gathered to create a common response to common response to an increasingly common menace: investor-state suits, in which foreign corporations are dragging sovereign governments to extrajudicial courts to demand taxpayer compensation for health, environmental, and other public interest policies.” http://citizen.typepad.com/eyesontrade/2013/05/last-week-13-latin-american-governments-gathered-in-guayaquil-ecuador-to-hatch-a-common-response-to-an-increasingly-common-m.html
When transnational corporations make the ‘rules of the game,’ when their lawyers sit in judgment, all bets are off: Anything goes. But you may be sure it will cost you.