President Barack Obama made one of his favorite arguments for the Trans-Pacific Partnership in an interview with the Wall Street Journal this week. "If we don’t write the rules, China will write the rules out in that region," Obama warned. He elaborated on his concerns later in the interview:
We want to make sure that you [e.g., China] are not manipulating your currency. We want to make sure that you are not, you know, having state-sponsored organizations subsidize and effectively dump goods into our markets and undercut our prices.
We want to make sure that our intellectual property is protected, that you are enforcing fair and neutral laws when it comes to U.S. foreign investment and not forcing technology transfer. You know, so there are just a whole range of rules that we want to make sure they’re abiding by. And we want to make sure that the other countries surrounding China are abiding by them as well.
One problem with this argument is that it's not clear the TPP would accomplish many of these objectives. China isn't a party to the TPP, so the agreement wouldn't stop China from subsidizing its exports or stealing American technology. And the Obama administration has pointedly refused to include currency manipulation language in the TPP, arguing that insisting on it would cause countries like Japan to walk away from the table.
But the larger problem with this argument is the assumption that if "we" — American negotiators — write the rules, then it must be good for the American people. But that's not necessarily true.
Take intellectual property, for example. The TPP is expected to include a provision requiring countries to extend copyright protections to the life of the author plus 70 years. It would also require countries to adopt a law similar to the Digital Millennium Copyright Act, the law that recently created legal headaches for Americans trying to transfer their smartphones from one wireless provider to another.
The deal is also expected to require countries to provide patent protections for minor modifications to existing patents, a practice that can effectively extend the life of patented pharmaceuticals. The Obama administration is also reportedly pushing to extend the period of time when the makers of drugs called biologics are shielded from generic competition to 12 years — despite the fact that Obama's 2016 budget proposed reducing this period to seven years.
It's obvious how industry groups with close ties to US trade negotiators would benefit from this language. American movie studios and pharmaceutical companies naturally want stronger protections for their products. But the requirements don't seem beneficial to American consumers. To the contrary, the whole point is to preserve copyright and patent monopolies in order to force consumers to pay more.
And that's the problem. Having America write the rules for trade in Asia sounds great until you realize that the people representing "America" aren't necessarily focused on the interests of the American public at large. Too often, they're focused on the interests of narrow US interest groups like drug companies and movie studios.