Further pushback to the Krugman column that Stephen Grenville quoted in his piece on the TPP yesterday. Gideon Rachman shares Grenville's view that Krugman is too busy looking at the economic trees to see the strategic forest. But unlike Grenville, who wants the TPP to embrace China, Rachman judges that the TPP is intended as a response to the threat China poses to America's centrality to the global economy:
Both the TPP, which groups 12 Pacific Rim countries including Japan, and the Trans-Atlantic Trade and Investment Partnership, the EU-US negotiations launched in July, are really big strategic, rather than economic, projects. They are about responding to the changing shape of the global economy and the rise of China and other emerging economies and trying to reinforce the US (and to a lesser extent, the EU’s) position at the centre of it. They are, particularly in the case of the TPP, about security policy as much as economic policy. If, as the FT’s Geoff Dyer puts it in his new book, the “contest of the century” is the one between the US and China, then trade deals (as they often have in history) have a whole other purpose.
The Economist's Ryan Avent, meanwhile, says Krugman is wrong to say that the TPP is all about protecting the interests of intellectual-property monopolists:
Services account for four times as much economic output as goods production in America but only around one-fifth of American trade. Many services aren't tradable, of course; haircut tariffs will not be on the TPP agenda. But a growing array are. And rules on service trade have barely changed at all in two decades. TTIP and TPP (as well as the Trade in Services Agreement) are aimed at updating rules on services trade to make it easier to sell insurance, or financial and consulting services, or IT and environmental services, and so on, across borders. Now maybe these deals are "really about" intellectual property, and all-powerful Hollywood has convinced the government to expend a lot of time and effort setting standards for services trade, the better to provide a smokescreen for its own nefarious activities. But I doubt it.
Photo by Flickr user Digimist.