Trading aces

Buster Keaton in Sherlock, Jr. (1924), via.

Well, here's a challenge: David Brooks out with the big guns in favor of the Trans-Pacific Partnership, forcing me to take a hard critical look at some arguments I'd just wave at if somebody else was writing them because I don't especially want to fight with the conclusion.

Actually there are some superficial signs that somebody else was writing them. The piece is basically entirely coherent, and remarkably sourced, with a total of seven links to information backing up his assertions. That is not Brooksian, particularly when we're talking about a subject as boring as trade policy; he had to look at seven different things, possibly more, in order to crank this out? On the same weekend he was putting out an entire, though feeble, repetitive, and recycling-filled, Dartmouth commencement address?

My first thought was that it must have been altogether ghosted, by some bright young person at the Manhattan Institute or wherever. But there are structural signs he did in fact lay it out himself: the characteristic form of a listicle of italicized representations of the bad things rejecting the TPP will accomplish:

Impoverish the world’s poor.

Technically, I suppose the world's poor are impoverished already, that being what impoverished means. What he means is presumably that an enacted TPP will depoverish them to some noticeable degree, as happened to Mexico following Nafta—his source for the Mexico assertion is a recent Wapo column by Fareed Zakaria, which I wouldn't dispute (some diehard Nafta-haters certainly would).

Since none of the parties to the agreement are high-unemployment countries in the way Mexico was 20 years ago, I have some trouble understanding how this is going to work. As Zakaria himself notes, the trade liberalization that made it possible for Mexico to industrialize and build up some employment opportunities starting in the late 1990s has happened in other countries as well without a multilateral trade agreement, including Malaysia, Vietnam, and Peru. If anything, the privileged status these countries get will have an impoverishing effect on the countries they compete with: Cambodia and Myanmar suffering from the advantages given to Vietnam, Ecuador and Bolivia losing out to Peru.

There is something exceedingly important in the TPP for the oppressed workers of Vietnam, as you can see if you follow up Brooks's link to Tyler Cowen's blog, but it has nothing to do with trade liberalization; it's about those side agreements, which are supposed to guarantee the rights of Vietnamese workers to organize in effective unions, enforced by the possibility of trade sanctions. Whether they actually do that is another question. A group of Vietnamese civil society organizations has asked that the Congress not pass fast-track authority until a number of practical steps are taken in advance, demonstrating that the TPP guarantees will be taken seriously.

In order for human and labor rights that are clearly spelled out in UN Conventions and in the Vietnamese Constitution to be truly respected in Vietnam, we believe that the U.S. Congress must use the opportunity of granting fast track authority as leverage to make immediate transformative changes so that the citizens of Vietnam can enjoy their human rights and basic freedoms, especially the freedom of association and the freedom to establish independent labor unions.

These clearly do not oppose TPP itself; they just want it to be meaningful. They sound a little like Hillary Clinton did over the weekend.

Similarly, there's a need to show a commitment to ending human trafficking in Malaysia. I'm not convinced stopping fast-track is the way to take care of these, but if the final draft of the TPP doesn't effectively deal with these problems it won't be worth passing.

Meanwhile, just note that Brooks uses the two items cited under this heading to back up statements they don't in fact support.

Damage the American economy.

Brooks notes (citing Jason Furman) that tariff reductions have contributed 7.3% to incomes since World War II, but doesn't note that that glorious process is basically finished, and has been for some time. The TPP isn't going to reduce tariffs very significantly because, as Krugman has pointed out, they're mostly gone already. If, as the study Brooks cites by Petri, Plummer, and Zhai claims, the TPP will have raised US incomes by 0.4% by 2025, which Brooks seems to think is a pretty big deal, that, for a person with an annual salary of $50K, amounts to a total of $200 a year. Really?

I love it when Brooks shows his unfamiliarity with fifth-grade arithmetic.

But the other problem is whether this pathetic income gain will be equally shared. The profits from growth have gone mostly to those with the top incomes, as we know, since the 1980s, and as long as r > g, the rest of us aren't going to see much of it. This prediction is not very encouraging; to overcome inequality, we need much faster growth than this promises (and the missing rules against currency manipulation).

Stifle future innovation.

This is the Republican part, with no sources quoted at all, because there aren't any. It's about the intellectual property rules, which are the most wrong-headed bit of the TPP as we currently understand it, and which I have been hoping the other parties will continue to reject, 11 to 1. And the idea that the jobs encouraged in the US will be in the service sector rather than manufacturing, which I think is happening anyway.

The following unsourced assertion

Service-sector industries like these are where America is strongest, where the opportunities for innovation are the most exciting and where wages are already 20 percent higher than in manufacturing.

is completely off the wall. Manufacturing wages are almost certainly, if anything, a bit higher than services. I'm not going to even attempt to find out where he got it; it's clearly another one of those statistics Brooks finds it convenient to make up out of his ass.

Imperil world peace.

Here's where my interests and Brooks's begin to converge a bit, though the way he puts it is certainly hyperbolical:

As various people have noted, the Democratic vote last week was a miniversion of the effort to destroy the League of Nations after World War I. It damaged an institution that might head off future conflict.

I've used the comparison to the League of Nations myself, but only to point toward the general need to have more international agreements. If Brooks's point is that there's an unattractively nativist element in traditional American populism, though, and that it's showing here, I agree. Then again, I don't recall hearing him speak out in defense of any of the other agreements I'd like to see the US adopt that have been held back for decades by congressional conservatives, from the Law of the Sea onwards. Where was Brooks when the Republicans took fast-track authority away from Bill Clinton, come to think of it?

There's a bite to the little dig

Some Democrats are suspicious because it was negotiated in secret. (They seem to have no trouble with the Iranian nuclear treaty, which is also negotiated in secret.)

(I have no trouble with the Iranian nuclear agreement-not-treaty, and I recognize the need for secrecy in the TPP.) And I'm glad to see him linking to some additional material on the relatively benign character of the Investor-State Dispute Settlement (ISDS) procedure. This last touch suggests that he does have a really good intern this summer, or has had lunch with somebody at the Center for Strategic and International Studies. There's no way he found the thing himself.

But the bothsiderist peroration

The Republican Tea Partiers are suspicious of all global diplomatic arrangements. The Democrats’ version of the Tea Partiers are suspicious of all global economic arrangements.

is as nasty as can be, and as illiterate an attack as one can easily imagine on people like Paul Krugman and Joseph Stiglitz, both Nobel-prize–winning opponents of the TPP and as unlike teahadis as possible. And the cheap shot against the probable 2016 Democratic presidential candidate

It would be nice if Hillary Clinton emerged and defended the treaty, which she helped organize. 

is just cheap. I think she's handling this exceptionally well.

All in all, then, no, no danger I'm falling into agreement with Brooks. I may want to see the fast-track process work itself through before I condemn the TPP, in the interest of those Vietnamese workers and of new possibilities for protecting the planet, but I don't have anything in common with him at all. And I guess he did write it himself, if with a good deal of help from his friends and employees, after all.