#TPP: The Latest Assault on Free Trade

Misses Institute

October 7, 2015

free tradeThe Trans Pacific Partnership is just the latest assault on free trade, although, like previous assaults before it, such as the North American Free Trade Agreement, it is labeled as having something to do with free trade.

Today’s Mises Daily article describes it best: agreements between governments have nothing to do with free trade. This was the understanding of the early laissez-faire liberals. To have free trade, governments merely need only refrain from restricting it. And more specifically to the situation in the US, to allow free trade, the US government merely need refrain from prosecuting people who attempt to trade with foreigners who do not have the official stamp of approval from the US government. (See also Carmen Dorobat’s article from yesterday.)

To support restrictions on free trade is to support the jailing and prosecution of peaceful private citizens who trade with foreigners. Whatever the motivation, whether it is to attempt to punish foreign regimes (as with supporters of the Cuban or Iranian embargoes), or protect certain favored industries, the fundamental mechanism behind restrictions on trade is the prosecution and punishment of private entrepreneurs who engage in peaceful trade.

The TPP, like all other trade agreements of its type, was designed to serve the strategic interests of the governments involved, and has nothing to do with opening up new opportunities for free trade among ordinary members of the domestic societies that are taxed to finance the governments involved. There is no doubt that certain large corporate interests with political power will benefit from agreements like TPP. Large interests have the clout and the resources to change and shape these agreements to favor them. Small enterprises and businesses, and small entrepreneurs will only endure greater restrictions.

The New York Times reports how US allies are using the TPP as a “check on China.” It’s a national “security” scheme and has nothing to do with freer trade for you and me. Meanwhile, the CBC (Canada) admits that the TPP will do little to actually lower your grocery bill or the price of automobiles. So, if a trade agreement does nothing to actually make goods more available to the public, what does it have to do with free trade? The answer is: nothing.

The TPP and the Trade Rhetoric

The final and most important effect of this rhetoric is that when the TPP will fail to bring about the touted benefits—as it will not in fact promote a wider and freer division of labor—the market will become the scapegoat once more. And governments will again be called in to address the ‘market failure’. To paraphrase Elinor Dashwood (of Austen’s Sense and Sensibility), the market will suffer the punishment of a badly done trade agreement without enjoying any advantages. Read more



2 thoughts on “#TPP: The Latest Assault on Free Trade

  1. Have You seen Martin Armstrong write-up about Malaysia?

    “Malaysia is becoming the poster-child for the crisis in Emerging Markets. The rising tensions between people and government and how things are all connected are clearly being demonstrated by this story developing within the emerging markets. In Malaysia we hear the Central Bank is recommending criminal prosecutions in connection with the controversial investment fund 1MDB – the BBC reported. 1MDB was a sovereign wealth fund which was set up by Malaysian Prime Minister Najib Razak, and invested nearly $1.83bn abroad without using proper procedures. The investment bank Goldman Sachs is at the center of the criminal investigation in Malaysia since it organized 1MDB to raise U.S. dollar debt to finance acquisitions of power plants. The currency swap from dollars was also done by Goldman Sachs.”

    Liked by 1 person

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