Nobel Prize economist slams TransPacific Partnership: It's managed trade, not free trade

Nobel Prize-winning economist Joseph Stiglitz takes a close look at the TransPacific Partnership and its sister, the TransAtlantic Partnership. What he sees isn't pretty: a regime of manged trade to benefit crony capitalists while lowering living standards for the rest of us. And it's all cloaked in secrecy.

Stiglitz is merciless in his critique of the Obama administration's phony "free trade" agreements. Writing in The Guardian, he begins by calling these deals out for what they are: managed trade, not free trade.

it now seems clear that the negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the West.

Those special interests include 25,000 huge cotton farms who benefit from water and production subsidies courtesy of US taxpayers, and the biggest hogs feeding at the government trough: Wall Street bailout banks and Big Pharma.  As in the past, these rigged trade deals would give them special privileges and protection.

no trade agreement should put commercial interests ahead of broader national interests, especially when non-trade-related issues like financial regulation and intellectual property are at stake. America’s trade agreement with Chile, for example, impedes Chile’s use of capital controls – even though the International Monetary Fund now recognizes that capital controls can be an important instrument of macro-prudential policy.

Other trade agreements have insisted on financial liberalization and deregulation as well, even though the 2008 crisis should have taught us that the absence of good regulation can jeopardize economic prosperity. America’s pharmaceutical industry, which wields considerable clout with the office of the US Trade Representative (USTR), has succeeded in foisting on other countries an unbalanced intellectual-property regime, which, designed to fight generic drugs, puts profit ahead of saving lives. Even the US Supreme Court has now said that the US Patent Office went too far in granting patents on genes.

And he blasts the way these deals are being negotiated.

the US is committed to a lack of transparency. The USTR’s office has been reluctant to reveal its negotiating position even to members of the US Congress; on the basis of what has been leaked, one can understand why. The USTR’s office is backtracking on principles – for example, access to generic medicines – that Congress had inserted into earlier trade agreements, like that with Peru.

Bottom line:

we have a managed trade regime that puts corporate interests first, and a process of negotiations that is undemocratic and non-transparent.

The likelihood that what emerges from the coming talks will serve ordinary Americans’ interests is low; the outlook for ordinary citizens in other countries is even bleaker.

Read Stiglitz' searing indictment of the Obama administration's crony capitalist sellout here: