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Recently, the strangest thing has happened.  Two American Nobel Prize-winning economists (Joseph Stiglitz and Paul Krugman) have called for the United States to stop negotiating new trade agreements.  Specifically, they have called for a halt to the Trans-Pacific Partnership (TPP) talks and urged Congress not to give the president a mandate for these and other trade negotiations by enacting new Trade Promotion Authority.

Their primary stated reason for taking an anti-trade agreement position is that expanding trade leads to domestic job loss.  Of course, more jobs by far are lost to productivity-enhancing technological breakthroughs.  Yet these economists have not called for the removal of ATMs so that more bank tellers can be hired.  They have decided, as King Canute must have when he found that he could not command the tide, that it would be foolhardy to resist technological change.  Turning the clock back on either technology or trade is neither possible nor desirable.  Any attempt to do so will only slow economic growth and limit human potential.

Both technological progress and trade agreements change the status quo.  And that requires adjustment.  This is where policy attention should be directed, because the United States is not as advanced as it should be in training a workforce that can continuously adapt to the need for new skills.  Failure to meet this need will only assure that fewer new jobs will be created in the United States in the future.  Curtailing attempts to remove foreign barriers to trade is simply focusing on the wrong target.

There is another major fault in the anti-trade position:  It is founded on a basic misunderstanding of what the TPP and Transatlantic Trade and Investment Partnership (TTIP) talks are about.  Yes, some longstanding areas of U.S. protection would be removed, but the U.S. market is already open with few exceptions and the areas that are still protected are not what any economist or policymaker would hold out to be the future of the American economy.  U.S. trade negotiations are largely about providing new opportunities for business and workers through better international rules.

The following are a few examples of what up-to-date trade agreements could do:

Freedom for cross-border data flows.  The major trade agreements that are in existence today were negotiated before the Internet became essential to global commerce.  Being able to employ the Internet is the way small and medium enterprises, as well as large multinational companies, can gain access to global markets.  But this technology is threatened with new protectionism – such as requiring servers to be located domestically.

Free trade in environmental goods and services. Likewise, existing trade agreements were negotiated before climate change became a dominant concern for policymakers in all major trading countries.  Leaving these items subject to import barriers runs counter to this new policy imperative.

Disciplines on state-owned enterprises. In many countries, government enterprises go beyond the provision of needed public services and engage in business.  They should then act in accordance with commercial considerations rather than becoming a means for their government owners to skirt international rules.

Opening markets for services.  With the advent of the Internet, it is far more practical to supply services across international boundaries.  While there is a code for services trade under the World Trade Organization, it applies to far too little of the spectrum of services that can be internationally traded.  Liberalization in this area can create millions of jobs in the United States alone, and a multiple of that globally.

Curbing the unnecessary trade-restricting effects of product standards.  Tariffs can slow trade, but product standards can prevent it altogether.  Where the objectives are the same – e.g., safety of automobiles – there should be a mutual interest in adopting standards that are compatible rather than conflicting.

Honoring intellectual property rights.  Innovation requires that benefits accrue to those who engage in intensive R&D efforts and bring new products to the marketplace.  Trade secrets, as well as patents and copyrights, should be protected.  Economic growth and global welfare require it.

Each of these initiatives, and the other subjects addressed by TPP and TTIP will create new opportunities for business and for employment. U.S. objectives in these negotiations are far from secret, and they deserve support.  Far from calling a halt to current trade talks, the progress should be accelerated and the results should be given the means to achieve formal congressional input and approval.

Wolff serves as chairman of the National Foreign Trade Council and practices law at the firm of McKenna, Long and Aldridge.  He was a senior trade official in the Carter and Ford administrations.

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Comment Preferences

  •  1 word: NAFTA (3+ / 0-)
    Recommended by:
    The Dead Man, Pale Jenova, Tool
    Tariffs can slow trade, but product standards can prevent it altogether.  Where the objectives are the same – e.g., safety of automobiles – there should be a mutual interest in adopting standards that are compatible rather than conflicting.
    Translation: regulation bad. Profit good. Regulation hurt profit.

    Rich motherfuckers don't care about safety or what jobs we have left.

    You can just get lost.

    Legal means "good".
    [41984 | Feb 4, 2005]

    by xxdr zombiexx on Thu Apr 24, 2014 at 04:57:50 AM PDT

  •  Copyright Violation HR'd (5+ / 0-)

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Apr 24, 2014 at 05:06:07 AM PDT

    •  Wow, lifted in entirety (1+ / 0-)
      Recommended by:

      I guess "Google" never dawned on the writer.

      And God said, "Let there be light"; and with a Big Bang, there was light. And God said "Ow! Ow My eyes!" and in a flash God separated light from darkness. "Whew! Now that's better. Now where was I. Oh yea . . ."

      by Pale Jenova on Thu Apr 24, 2014 at 07:25:09 AM PDT

      [ Parent ]

  •  I'm personally opposed to any trade with Japan (2+ / 0-)
    Recommended by:
    Tool, allie4fairness

    as long as that country continues killing whales. Not only is the whaling policy evil per se, but the outrageous lie that Japan is slaughtering hundreds of whales per year for research shows Japan's contempt for the intelligence of everyone else in the world.
      Of course, the TPP, like other free trade agreements, would severely limit our ability to pass environmental laws, particularly those that affect "free trade."

    As for the rest of the above screed: This guy wants to do away with product standards?
    And wants to eliminate the freedom of nations to operate state owned enterprises?
    The TPP is obviously bad for Americans, for the average people of the world, and good for nobody but the international corporations. I can't see voting for anyone who supports it.

  •  Did you do this in college (1+ / 0-)
    Recommended by:
    Pale Jenova

    cause you would have been expelled for this blatant plagiarism. What's worse is you picked third way tripe to copy. I dunno what's worse.

    “The further a society drifts from the truth, the more it will hate those that speak it.” George Orwell

    by Tool on Thu Apr 24, 2014 at 10:30:36 AM PDT

  •  What an idiot.... (0+ / 0-)

    ...has enough time to follow himself and set up a picture avatar but none to post original content.

    I suspect he is reporting Dkos for copyright violations as we post.

    We Glory in war, in the shedding of human blood. What fools we are.

    by delver rootnose on Thu Apr 24, 2014 at 02:32:43 PM PDT

  •  Well, don't count on support from Japan (0+ / 0-)

    Looks like Obama took strike two after swinging in Japan.

    On the other hand, if, as you suggest, the TPP is being negotiated in an open fashion and there is ample information available about it for public debate, can you please link to a text of the agreement in current draft NOT sourced from Wikileaks?

    Otherwise, this diary seems to be an empty vessel of corporatist talking points not deserving of serious consideration.

    Or maybe just clueless PR spam for Deep Blue Group of Company (sic), LOL?

    No one is coming to save us, the future is in our hands.

    by koNko on Mon Apr 28, 2014 at 03:52:09 AM PDT

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