The Best Trans-Pacific Pact is No Pact

By MARK ANDERSON

In late July, the co-leaders of the House Ways and Means Subcommittee on Trade sent a letter to President Obama complaining that Japan and Canada refuse to make satisfactory cuts to the tariffs those nations charge at the water’s edge.

Subcommittee members argued that this creates an unfair playing field for US goods exported to those two countries under the Trans-Pacific Partnership, or TPP.

The letter was sent by Subcommittee Chairman Devin Nunes (R-Calif.) and Ranking Member Charles Rangel (D-N.Y.) It conveyed their concerns over the status of agriculture-market access talks with Japan and Canada within the overall TPP negotiations—especially the effort by those two countries to balk at the complete elimination of tariffs charged against US foods and goods.

The letter states:: “Specifically, Japan is seeking to exempt numerous tariff lines from complete elimination with the United States. If accepted, this unprecedented and objectionable offer would significantly limit access for US farmers and ranchers to the Japanese market ...”

Absent is any concern or explanation as to how Japanese rice farmers, who already grow enough rice to feed their own population and export the surplus, could possibly benefit from the TPP, under which it’s expected that American-grown rice would be virtually “dumped” into Japan. It’s the natural inclination of a sovereign state to adequately protect those domestic industries which perform well. And tariffs are the main protection tool.

The only trade philosophy that works is for each of the world’s nations to create goods and food first for their own populations, which must have the jobs, purchasing power and credit they need to buy the output of their own producers. Otherwise, exports are sent in search of more wallets and purses overseas when we need more buying power at home. Surpluses not needed for domestic consumption or storage can be exported.

And no nation need import those things it grows or makes for itself—unless there is a shortage that needs to be filled. The more natural resources, good farm land and production facilities a nation has, the more self-sufficient it becomes and therefore has less of a need to import things from other nations. The less a nation has, the more import-dependent it is. That’s reality.

But whenever we depart reality and starting talking as if fairness, morality and logic do not apply to trade—and argue that it must be “free” (free from public control and oversight)—we enter the realm of madness. And eliminating all tariffs is part of the insanity.

The letter to Obama added: “Furthermore, caving to Japan’s demands would set a damaging precedent, compromising the US negotiating position with future TPP members. We urge you to hold Japan and Canada to the same high standards as other TPP partners. Otherwise, Congressional support for a final TPP agreement will be jeopardized.”

Moreover, there’s another lovely trade deal which, like the TPP, seems destined to be a job-killer—the Transatlantic Trade and Investment Partnership, or TTIP. That scheme also may be adversely affected by the refusal of Japan and Canada to drop all their tariffs under the TPP.

Ways and Means Subcommittee leaders are afraid that EU nations under TTIP also will be reluctant to surrender all tariffs in that proposed EU-US pact.

But instead of prodding Japan, Canada and other allies to lower their tariffs, the US could raise its own tariffs to roughly the same level to achieve fair and balanced trade with proper protection of domestic industry. The grand irony is that if Canada, Japan and other nations won’t abolish all their tariffs, then US congressional support for the TPP may fade.

Let it fade. Given this opportunity to rediscover common sense, members of Congress right now need to hear one thing very clearly. The best TPP is no TPP.

Mark Anderson is a veteran journalist who divides his time between Texas and Michigan. Email him at truthhound2@yahoo.com.

From The Progressive Populist, September 1, 2014