Far From ‘Free Trade,’ the TPP Is About Global Power and Corporate Favors

Back in December, I argued in the Huffington Post that the Trans-Pacific Partnership (TPP) is really not about “free trade,” but about serving the strategic interests of Washington.

Negotiations are still ongoing (mostly in secret, somewhat notably) and many of the details are not known (except for a leaked chapter published by WikiLeaks). While some smaller countries in the Asia Pacific are likely to get a boost economically, the economic gains for the U.S. are minimal: “only 0.13 percent, $27 billion, by 2025,” according to Samuel Rines at the National Interest. “But,” Rines notes, “realizing an immediate economic benefit is not the American goal.”

It’s more about engaging with emerging Asia and being present while the rules of trade are set. Exports and privileged access to the US market benefit emerging Asia, as the terms of trade will favor them over trading partners not at the table. The US and Japan could also act an economic counterbalance to China in the region—helping the smaller, less-developed countries compete for export growth.

While China has said it would like to be part of the discussions, it has yet to sit at the table. China would stand to lose about 1.2 percent in exports, but only about 0.3 percent GDP—translating to only $57 billion in export losses and $47 billion lower GDP. These losses are easily surmountable, and China does not lose enough to be convinced to participate in discussions surrounding state-owned enterprises (SOEs) and governmental participation in the economy.

If one wants free trade, one should encourage open and free commerce across borders without protective tariffs, subsidies, or strictures that crowd out competition for favored corporations. The TPP may lower some tariffs over time, but U.S. lobbyists are pushing for provisions that would keep tariffs, subsidies, and protectionism for big businesses in the U.S. while subjecting everybody else to the grind of competition (for details, see my HuffPost article).

China is being effectively excluded from involvement in the supposed “free trade” deal thanks to provisions that single out specific structures of the Chinese economy for reform. One example cited by Rines is the provisions on targeting state-owned companies, of which China has many.

“Some proposed definitions would go so far as to define an SOE as any business in which a government has a stake, limits the amount of competition, or acts on the company’s behalf,” Rines explains. This is too broad and would target lots of U.S. companies, so Washington is pushing for more specific language to single out Chinese companies, thus discouraging China’s involvement in the deal.

“When it comes to TPP clearly the focus is not the economics for the U.S.,” Rines asserts. “Hailed as part of the Asian pivot, the TPP is more political than anything for the U.S.”

So really the TPP isn’t about free trade. It’s about global power and corporate favors for U.S.-based companies. It’s about boosting Washington’s geopolitical leverage in the Asia-Pacific. It’s about staving off China’s inevitable rise for the sake of preserving America’s global hegemony.

32 thoughts on “Far From ‘Free Trade,’ the TPP Is About Global Power and Corporate Favors”

  1. Thanks for the updates in this article, and the one at HuffPo, Mr. Glaser. From what little we do know, TPP will more or less hand sovereign power to corporations while leaving taxpayers on the hook for any loss of "expected profits" even if that loss results from corporate action. It's a giant corporate welfare scheme that appears to be only slightly better than having a collection of private banks (but known as the Federal Reserve) create the nation's money out of thin air, and charge interest on it. The very fact it had to be negotiated in secret – and remains secret even as Congress prepares to vote on it – is a clue that TPP contains huge profits for corporations, with all costs to be borne by non-corporate taxpayers. Congress should not be allowed to "pass this bill so we can find out what's in it" as was done with Obama(don't)care. There's nothing about "free trade" in a pact that excludes the globe's largest producer/consumer nation, China. It is, as Mr. Glaser makes clear in this article and the one at HuffPo, all about crony "capitalism" and government power. Haven't we already suffered enough from such "free trade" schemes?

    1. "The nation-state has become so powerful that it cannot perform its stated functions. Just as General Vo Nguyen Giap could use the U.S. military machine to win his war, so the multinational corporations and professions can now use the law and the two-party system to establish their empire. But while democracy in the United States can survive a victory by Giap, it cannot survive one by ITT and its like. As a total crisis approaches, it becomes more obvious that the nation-state has grown into the holding corporation for a multiplicity of self-serving tools, and the political party into an instrument to organize stockholders for the occasional election of boards and presidents." – Ivan Illich, 1973

  2. The corporate America is about corporate America wanting to dominate the world economy by not cooperating with anyone but corporate America. This idea flourished from concept in New World Orders announced by Bush father regime after the gulf war and still a on going agenda. More of wars conducted, more of involvements of those whom silently orchestrating the idea we will see, like Saudi Arabia and UAE, Turkey and especially NATO engagements in waging wars. The democrats believe that Obama is not a war president, but that doesn't mean that his friends can orchestrate wars with his total support, helping them to wage the war where NATO can have a military base or missile defense system stationed, like in Turkey and Jordan. That doesn't mean that Turkish government will stop its openly supported avenues for terrorism to enter Syrian territory killing Armenians or people with other fait then theirs. That doesn't mean that Saudis are not going to ship their mercenaries into Syria or providing these barbarians with weapon using Turkish territories, or to other Arab nations whom are against EU- USG global economic agendas. All that new missile and NATO talk about Eastern Europe is about corporate America and EU.

    Be prepared for a much larger wars, the Libyan mercenaries and those whom are in control of Libya streets already shipping weapons to Egypt and Syria, the blessings are from Saudis, UAE and Turkish government which all are the friends of USG and EU governing body, and if you think that Obama administrations don't know about what is happening you are naive enough believing that US Democratic Party is about world democracy.

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  18. I think free trade helps in rising in global economic power for any nation of the world. It empowers its economy with strong positive and friendly relationships with other countries.

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  22. It's about worldwide force and corporate favors for U.S.-based organizations. It's about boosting Washington's geopolitical influence in the Asia-Pacific. It's about fighting off China's unavoidable ascent for the sole purpose of safeguarding America's worldwide administration. learn more about intl politics by enrolling in life experience degrees program in political sciences.

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